My Review of BiggerPockets Conference 2021 (BPCON2021) and Notes
I took a break from ripping Pokemon booster packs with my brother on Facebook Live this week to attend a Bigger Pockets Conference with 1,500 other attendees in New Orleans. Below are my notes and thoughts.
Read to the end to see my skeptical remarks about the real estate market and conference.
Why I Attended BPCON2021.
I went to BPCON 2021 for several reasons:
To connect with some GoBundance brothers,
To get business perspective of where we are at in the housing cycle and how real estate investors are thinking and feeling. This is important to me since I liquidated much of my equities portfolio three weeks ago and I am now in cash looking for the next opportunity, and
To get personal perspective and be inspired by others who are big action takers. Getting out of my normal environment gets me motivated and provides me the space for clarity. Since I recently leveraged out of the majority of my operational tasks in my businesses, clarity on my next highest and best use to the marketplace, to my tribe, and to myself (finding something I really enjoy doing), is important to me.
To summarize, I attended BPCON2021 to connect with other big action takers and get business and personal perspectives.
BPCON2021 Notes.
The BPCON2021 event started off with Hal Elrod, a classic, who I've seen already seen this year (another time in Asheville, North Carolina at a DLP event) who goes over timeless visualization techniques and success habits.
His story is always incredible to hear. Highly recommend checking out his book, Miracle Morning.
Here are my takeaways from Hal's speech:
It doesn't matter what happens around you, it matters what is going on inside of you (don't let your external environment dictate your internal environment).
You can't change the past, focus on the present and figure.
The closer you get to reality, the better.
Pain is self-created by our resistance to reality.
Everyone wants Level 10 fulfillment yet few are willing to become a Level 10 person.
BPCON Breakout Sessions.
I went to the breakout sessions during the day though they were primarily geared toward first time or newer investors (nothing wrong with it, just not relevant to me), so I left and spent time networking with others in the hallway. Gearing the conversation to newer investors makes sense as they are BiggerPocket’s target audience. I left three of the sessions early because the level of conversation was lower than what I experience elsewhere. The next time I attend BPCON I’ll spend more time researching the specific speakers and just attend their breakouts.
Despite skipping out early on most of the breakout sessions, this event was a good value for $850 per ticket. This is because the value of the speakers is only 1/3 of the value of the event. The primary value of events like this to me is in building relationships with new people (and connecting with those I already know) and having conversations with people who think differently than me. It’s also super fun and energizing to be in this environment with other people who want to improve their lives. Energy is infectious.
Economist Speaking on the Real Estate Market.
The keynote economist presentation the first night was by Brian Beaulieu, CEO and Chief Economist of ITR Economics. He was very, very bullish on still buying real estate and views low interest rates as a gift to take advantage of by buying more assets.
The audience applauded his rosy outlook and entertaining, fun-styled presentation to what is generally very boring information that puts the audience to sleep.
Here's my notes from Brian's speech:
People are in short supply and that is not going to change for the foreseeable future.
Government is going to spend and tax more.
Haven't seen fiscal responsibility since we came off the gold standard in the 80s.
We are gifted an opportunity to buy real estate at low rates before inflation hits
Don't fight the fed and don't fight the bond market. Go with the market that they create.
4 things to do with your money: save, spend, invest, and give it away.
In 6 to 9 months our supply chain issues should slow down.
By 2036 many baby boomers will be dead and technology will drive mostly everything. Millennials are the biggest generation ever.
Overall, Brian was extremely optimistic on buying real estate assets (due to low rates, demographic shifts, population growth, etc.) which aligns with the other conference speakers and the general sentiment of the audience.
My Favorite Session - Brandon Turner.
The keynote that I enjoyed the most is the one by Brandon Turner (and David Greene) on the second day. I went to all of the breakouts Brandon spoke at (this is where I received the majority of value from the event itself).
Here's some of my notes:
Passion means "to suffer" in Latin. Passion is suffering that you enjoy doing.
Passion, Vision, Action, and Emotion are your drivers. What are you passionate about? Where are you going? Tie your identity to your passion.
Burnout occurs when you are in misalignment with your goals.
Too much information can be a bad thing. Leads to inaction.
Find someone who has actually done it and go spend time with them.
Get one bridge to financial freedom completed so you can spend time on other stuff that matters to you.
Book recommendation: The Untethered Soul.
You start at the level of the mindset of the job you left (when leaving W-2).
Brandon continues to purchase properties today and shared that he and his team purchased 3,000 units ($200M) in the last twelve months. He is building a real estate investing empire and multiple other businesses around his personal brand and story. It's exciting to watch and I am a big fan of his and the way he is transparent with his businesses and why he is doing what he is doing.
To me transparency is key to becoming a super influential leader. Brandon isn't afraid to open his books to show what's going on. I do think he is the real deal with pure intentions of helping others achieve financial freedom through real estate and leading by example himself.
Here's My Other Notes from Various Other Speakers:
Directly reach out to owners to find deals. If it's on the market, it generally won't be a deal (still seeing 4-15 offers per property). Though most are reporting that the market is slowing down.
Price, condition, location, and cash flow are the four consideration points when purchasing.
The market has gone from mom and pop operations to now more toward hedge funds and private equity, who are systematically seeing things and can manipulate markets three years into the future. They have a competitive advantage (think Zillow having ShowingTime, Transaction Data on Dotloop, their website gauging buyer demand in each neighborhood, etc.).
Zillow / Opendoor are the largest threats to wholesalers, agents, mortgage, title, and insurance companies. This was brought up several times by several different speakers.
Economist Keynes famously said "The market can remain irrational longer than you can remain solvent."
Many investors are outsourcing tasks via Upwork and Fivrr. There is a preference toward independent contractors vs. W-2 for specific tasks that need to be done.
BiggerPockets took 15 years to take off. Are you willing to stick with it to see the hockey stick effect?
For Creating Your Own Podcast Platform: Who is the avatar that you're speaking to or targeting? Respond to every comment and post. Bring on people who excite you. Pre-bury the gold nuggets and then dig them up. Ask them: what fires you up right now? Energy is #1 thing. Always put on YouTube as well - Evergreen content.
In the land of the blind, the one eyed man is king.
Ed Mylett - only compare yourself to other people if you want to rise to their levels.
Don't tel me what you have and what you can do with it. Tell me what's possible.
When interacting with tasks: do you want to be a cadet or a general?
Think about scalability from the beginning.
Feedback and Summarizing BPCON2021.
Overall, the value of the event was really in all the new people I had the great opportunity to connect with.
My one small feedback to BPCON is to have nametags with people’s locations / company names on them. I think that would have created more conversations and connections for most people who are there for the first time and want to get plugged-in. Maybe even include what type of investor they are / type of real estate asset they invest in.
My other feedback is that the sessions I attended did not generally address any sort of downside risk of investing in real estate and how to mitigate liability.
For example, I know several investors who played it big and really struggled through COVID and lost a lot of their net worth. This was both from having renters who didn't pay and other liabilities (fires, shootings, lawsuits, etc.). I also know people who put money into syndications that did not pan out recently.
To me, these risks and potential outcomes weren’t really addressed enough during the conference. Further, there was no mention about the risk/return profile of investing in real estate versus other asset classes.
In my opinion, there should be a healthy skepticism for any asset class that addresses both the upsides and downsides. And, in my experience of going to conferences like this, we only really hear from the ones who play big and win. But we can learn just as much from those who play it big and lose, too. It’s easy for an audience member to think that there’s a lot of luck involved in some of the speaker’s stories — who simply played it big over the last five years and the market swept them up. This may and may not be the case. It’s important to distinguish the difference.
My Skepticism. Think Big and Question Everything.
Frankly, I went into the conference with a very skeptical mind. My perspective going in is that we are in a period of irrational exuberance in the real estate market with investors piling in on assets that have higher risk (based on the market cycle) with low returns. Yes, current fundamentals do show strong favor toward the asset class, still. Yet, when there's crappy properties being sold at 3.5 to 4.0 cap rates, after a 12-year real estate bull-run, it's super concerning to go all-in and play big right now.
The Counterargument for Playing Big Right Now.
After speaking with many of the larger investors, they’re fully aware of this exuberance, prices, and risks. Their counter argument for investing big into commercial real estate (apartments, storage, industrial, etc), even now, is that they plan to:
Play the long-game, and lock in the lowest interest rates in history via 15-20 year (30 year amortization) non-recourse loans. Avoid 5-7 year, recourse, balloon loan structures, which could be troublesome down the road with higher rates (this is what I thought was available, but longer terms are available). Many plan on holding the assets until they die. They also believe in inflation induced debt destruction.
Buy assets that generate 8-14% cash on cash returns which means that they’ll generally get their initial equity investment returned to them within 2-3 years.
Find and source deals off-market with brokers and bird dogs, to have padding (some discount) in the purchase price. Don't buy retail where possible. Find power brokers who can source deals or use direct mail or call centers.
Be aware of the downside risks of buying at this part in the market cycle and be mentally prepared for those risks upfront, and focus on the long-game.
Brandon did reference that time in the market is better than timing the market. The best time to plant a tree is always right now. This, again, is only relevant if you are playing the very long-term game.
Learning from Those Who Actually Do It.
The most important thing for me is to understand how these big players think. Perspective and context is everything. By attending BPCON2021, it definitely helped me figure out why these players are comfortable to play this big at this point in the market cycle.
I am fully aware of the long-term benefits of buying real estate assets, even in today’s market:
Cash flow
Depreciation
Principal pay-down
Inflation induced debt destruction
Appreciation
Yet, I keep hearing Warren Buffett in the back of my mind.
"Buy when there's blood in the streets"
There is no blood in the streets. The opposite. Mostly everyone at this conference is wildly optimistic about the real estate market due to low interest rates, and that’s going to change.
“Be fearful when others are greedy, and greedy when others are fearful”
It’ll be interesting to see what happens over the next few years as the Federal Reserve has projected they’ll raise rates in 2023. Even a cap rate change from 4% to 5% or even 6% could be disastrous for those purchasing properties (with a 5-7 year time horizon) at retail prices right now.
There's other asset classes out there that could provide similar returns using cheap financing with less market cycle risk. Real estate is just one investment vehicle to achieve your financial goals. Yes, real estate is a great horse to bet on long-term, not matter how you look at it. But only focusing on one asset class could be narrow focused and there may be other opportunities right in front of you.
So, yes, buying and holding for life, locking in the lowest interest rates in history, is definitely a viable move, yet it may not be the only answer to the question: how do I become financially free?
Congratulations to Bigger Pockets.
Overall, congratulations to Brandon, David, and the Bigger Pockets team on creating a wonderful platform and great culture of motivated, bright minds who want to get more out of life. Here's to a bright future. And, it's likely that I will attend another BPCON in the future.
If you're interested in following my journey more, here's how you can find me.
Instagram: @realestatejax and @brooksonbiz
Facebook: Jon Brooks
YouTube: Brooks on Business
LinkedIn: Jon Brooks
Tiktok: @MomentumRealty
Websites: movewithmomentum.com and brooksonbusiness.com
